Textile and textile materials into the country have helped to push Nigeria’s import index by 0.47 per cent in 2021, in defiance of the foreign exchange restrictions on its importation.
The value of imports in 2020, according to the National Bureau of Statistics (NBS) was N19.89 trillion having grown by 17.32 per cent year on year from 2019 to 2020. Imports stood at N16.96 trillion in 2019.
The value is now increased by 0.47 per cent at the end of 2021.
The Central Bank of Nigeria (CBN) as a follow up to its intervention to revive the textile industry, imposed forex restrictions on the importation of textiles, woven fabrics and clothes into the country
However, the latest commodity prices index report released by the National Bureau of Statistics (NBS) shows the policy may have lost steam as Textile and textile materials led the items that impacted the country’s import index in 2021.
“The All-commodity group import index on average increased by 0.47 per cent. The highest increase was recorded by Textiles and textile articles, followed by Boilers, machinery and appliances, parts thereof and Wood and articles of wood, wood charcoal and articles, ” the Bureau said.
The apex bank had in March 2019 intervened in the textile to assist it to meet local demand and create jobs.
Its Governor, Godwin Emefiele, announced the forex restriction at a meeting with textile manufacturers, and cotton farmers, halting forex sales from banks and Bureaux de Change to textiles importers, with immediate effect.
Some banks that failed to adhere to this directive were also fined several million Naira by the CBN.
The policy that is now in its third year to discourage textiles imports and revamp the local industry has, however, failed to curb the importation of the materials, as seen in the NBS import index for 2021.
This development as reported by the NBS contradicts the federal Government which says it is determined to revive the country’s cotton industry by reducing the $4 billion imports bill and creating two million jobs.
Trade, Industry and Investment Minister, Adeniyi Adebayo at a meeting last week
with a delegation of the National Cotton Association of Nigeria, NACOTAN said the cotton industry can transform Nigeria’s rural economy.
In the 1970s and early 1980s, Nigeria’s textile industry was the largest in Africa with over 180 textile mills, employing over 450,000 people.
Today, most of those factories have all stopped operations, leaving only 35 textile factories that are operating at below 20 per cent capacity with a workforce of fewer than 20,000 people.
The federal government has always promised to change the narratives as seen in 2019 when it flagged off the wet season cotton input distribution to 150,000 farmers in Katsina under the Anchor Borrowers’ Programme (ABP) of the CBN.
“They are to cultivate over 180,000 hectares of cotton that will feed the factories, according to Adebayo.
Beside the government’s inability to curb the textiles’ import, trade, generally nosedived as seen also in the NBS’ 2021 export index.
“The All-commodity group export price index averagely declined by 0.33 per cent in Q4 2021. The decline was majorly attributed to decreases in the prices of products of the chemical and allied industries, Mineral product Animal and vegetable fats and oils and another cleavage,” it added.
Data from the nation’s statistic agency showed trade is reversing in the country as exemplified by all products terms of trade (TOT) index which also showed a 0.25 per cent drop.
The terms of trade (TOT) represent the ratio between a country’s export prices and its im- port prices. The ratio is calculated by dividing the price of the exports by the price of the imports, usually in percentages. An increase in the terms of trade between two periods (or when TOT is greater than 100%) means that the value of exports is increasing relative to the value of imports, and the country can afford more imports for the same value of exports. For example, an increase in the price of oil between two periods (with oil production remaining the same) is likely to increase or improve the terms of trade for Nigeria and vice versa. The TOT is recorded as an index and can be used as an indicator of an economy’s stability.
The All region terms of trade on average also decreased by 0.25 per cent due to lower export prices to all the regions with rising import prices from all the regions.
The major export and import markets of Nigeria in Q4, 2021 were India, Spain, The Netherlands, France and China,” the NBS said. (Inside Business Online)
